By STEPHEN O'KANE, Staff Writer | Published April 12, 2012
While individuals and married couples can donate to the GRACE Scholars program and receive a state tax credit for doing so, corporate giving is being promoted as a much needed and significant way to help more children receive their education at Georgia’s Catholic schools.
GRACE Scholars, a program that was introduced in 2008, provides children from families with financial need throughout Georgia with greater opportunities to secure a pre-kindergarten through grade 12 Catholic education via tax dollars that are redirected toward Catholic school scholarships. The scholarships can only go to new students, either entering from public schools or just starting in primary grades.
“GRACE Scholars … allows families to send children who, in many cases, if not most, would not be able to attend Catholic school,” said David Brown, director of GRACE Scholars.
Set up as a student scholarship organization, or SSO, that is supported by the Archdiocese of Atlanta and the Diocese of Savannah, Georgia taxpayers are allowed to redirect part of their tax liability to the program, making them eligible for a 100 percent tax credit for their gift. Since 2008, some 3,000 taxpayers have participated in the program. Currently more than 420 students in Georgia are benefitting from the scholarships.
However, another facet of the GRACE Scholars program is often overlooked. The legislation allows for corporations to contribute to SSO programs as well, and in a much larger capacity.
“The corporate gifts can be much larger than the individual gifts,” said Brown.
The largest individual gift for a married couple filing jointly to receive a tax credit is capped at $2,500 per year, Brown explained. For a single individual it is $1,000 annually. However, a corporation can give up to 75 percent of its estimated tax liability. So, for example, if a corporation owes $100,000 in taxes to the state of Georgia, the corporation can give up to $75,000 to the GRACE Scholars program, said Brown. That means corporations are the potential major donors to SSOs.
“Unlike other kinds of fundraising, we don’t have any major individual gift donors. Our only major donors are the corporations,” he said.
Another form of corporate giving can come in the form of company matching gifts, Brown said. An individual donor can double or triple the impact of their personal gift by having a participating employer match the donation amount. GRACE Scholars, Catholic schools, and other Catholic organizations are eligible for matching under several company programs.
“The process of qualifying for a matching is usually straightforward. Typically, the employee secures a form from a company website or human resources department, completes it and sends it to GRACE. GRACE completes the charity’s section on the form and submits it to the company by mail or online. The company issues a check to GRACE according to its disbursement schedule,” explained Brown.
GRACE Scholars will designate the company’s match to the same designation as the employee unless company rules provide otherwise. Matching gift programs do not apply for Georgia tax credits, and rules regarding matching gifts vary among companies. Some examples of companies that have matched donations to the GRACE Scholars program include the Coca-Cola Company, General Electric, Bank of America and Morgan Stanley.
In 2011, its fourth year, GRACE Scholars received $3.1 million in donations from 2,001 taxpayers. In 2010 donors directed $3.7 million to GRACE Scholars. Some $2.9 million was given in 2009.
The competition for the tax credits is growing stronger each year as more people learn about the program. GRACE Scholars is the SSO of the Catholic dioceses of Georgia, but it is not the only SSO where taxpayers can direct their funds. Those who are interested in participating should begin the process sooner rather than later, as the statewide cap for gifts was reached in 2011 for the first time. Some GRACE Scholars donors who waited to give until late in the year were turned down for the tax credit, which had been exhausted.
In 2012, the statewide cap for the tax credit was raised to $51.5 million.
However, the most recent data from the Georgia Department of Revenue shows the gifts to all SSOs are coming in quickly. As of March 30, the state Revenue Department had approved $12.77 million in education tax credits. This was a $4 million jump since the previous biweekly report. It also means that about 25 percent of the credits available in 2012 have already been approved.
Brown reported that as of March 30, 2012, 163 taxpayers had redirected $326,595 to the GRACE Scholars program. By comparison, $69,210 was redirected during the same period in 2011.